Is loyalty dead?

[24601]

I must admit, I often wonder myself. Comments are common on here of people reaching gold/plat with one of the domestics then stop flying with them and use the opposition to 'build' status with them .... the thing is, doesn't that mean you'll be flying as a pleb as you run up the ranks? I cant imagine 'slumming it' on a competing airline whilst holding WP on another and missing the little niceties that I would otherwise be entitled to.
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Not if you're flying in business class on the other airline.

It costs more to get a new customer than to retain one. Yet, despite this, it does seem that many businesses reward new ones and ignore or penalise "loyal" ones. You get a big bonus for signing on to a new credit card, but not for staying with one, for example. But airline FF programs seem to be a bit of an exception. You are treated much better as a FF than new customers. IT is disappointing when "loyalty" inducements (or "benefits") are cut and cut again. It seems silly.

 

[tomo69]

Loyalty is dead once companies take it for granted. Consumers need a carrot in order to remain loyal take it away and the customer goes.

My VA loyalty has just about ended.

Same, and ive only recently split my loyalty between the two (VA & QF). Earning approx. 800 to 1000 SCs a year I figured ill go SG on both, which ive achieved, but if Virgin are halving my SCs on cheaper fares I'll just go back to QF.

 

[Moopere]

Not if you're flying in business class on the other airline.

Yes, I had pondered this. I guess as part of a strategy it could work out. You fly enough to maintain status with both, so the challenge is to not spend 6 months growing your status and slumming it, a couple of decent business flights, if they can be part of your plan, would probably go a long way to fixing that.

If one travels business most of the time anyway then theres really no need to worry about status at all.

I don't fly enough domestically to realistically try for decent status with the two carriers at the same time and internationally for my common destinations neither Oneworld carriers nor VA and its partners can fulfill the routes at anything resembling competitive rates so I'm a bit stuck. I considered joining a program in Scaryteam for a while, but even there, I'm too spread to make much of an inroad into status.

 

[coco50]

I must admit, I often wonder myself. Comments are common on here of people reaching gold/plat with one of the domestics then stop flying with them and use the opposition to 'build' status with them .... the thing is, doesn't that mean you'll be flying as a pleb as you run up the ranks? I cant imagine 'slumming it' on a competing airline whilst holding WP on another and missing the little niceties that I would otherwise be entitled to.

I suspect I just don't fly enough. I guess if you can build up gold or higher status in a month or so's flying then it wouldn't be as big a deal (???).

Yeah. It was good while I was working and flying a lot and racking up the status credits (points don't matter as much and you can get zillions on your CC), but when you retire you need to plan your spend shrewdly

 

[sumthinfornuthin]

There don't appear to be any benefits over and above platinum other than double points and the option of points or gifting status to someone else when you qualify/requalify.

Mmm...I'm almost Spire, sounds like it will be a letdown

 

[andreas]

Forgot to say, the other thing I like about Europcar is I feel like I'm double dipping. You get to build up free weekend rentals as well as Accor points. Do other companies offer this? Eg Hertz?

I dont think I can get downgraded as I usually get the smallest car possible, the compacts.....unless they wanna put me on a bike!

Yep, Hertz lets you accrue Gold Plus Rewards Points (to use for free rentals) while also claiming frequent flyer points, eg VA. You just need to manually put in a claim for the FF points after completion of the rental, via their web form (there's a link to it from the VA missing points section).

 

[Wingin..it]

No, loyalty to a genuine program or other consumer benefit is not dead it's more like how many or which one .Gimmicky programs eventually lose customers and reputations and good ones keep their reputations and people.Some are made better by one and others need them,which in turn can influence how they are approached in a marketing sense.I will stay loyal to something that provides the rewards and attitudes that will ultimately help me ,make me feel appreciated and or give future/immediate saving rewards.
It is an interesting topic and has many marketing ploys and strategies that will use behavioural and emotional inducements for the short term marketing and the long term .A mystery solved by individuals and groups.?:idea:

 

[prozac]

No, loyalty to a genuine program or other consumer benefit is not dead it's more like how many or which one .....A mystery solved by individuals and groups.?:idea:

You seem to link loyalty to a program when in reality good customer service trumps everything.

 

[drron]

You seem to link loyalty to a program when in reality good customer service trumps everything.

Was thinking about this yesterday when being taken home from the airport.We always use the one limo service because of the service we get.There is no loyalty program,others may be cheaper but we have always got good service so remain loyal.
Also thought about it checking out of the SGS Bangkok on Friday when the service is not covered by the loyalty program but was provided because we stay frequently.As I approached the desk to checkout there is a Chinese tour group with all the agents = many waiting.They are all arguing.One of the agents spots me,picks up the phone and the duty manager comes out of her office and personally checks me out.It is this customer service that keeps me loyal.but I would not have stayed there initially if it wasn't for the loyalty program.

 

[Mattg]

This discussion has got me thinking over the past week or so.

Whenever someone offers me a loyalty card (which happens pretty regularly!), I've started asking what the actual benefits are. To be honest, there seems to be a lot of loyalty cards that give nothing back to the customer! I don't need them taking up space in my wallet.

I was in Rebel Sport yesterday and they asked me to scan my loyalty card. I asked what I would receive in return and the lady said that my receipt would be stored electronically. When I asked if that was all, I was told quite bluntly "well this program is free to join, so it's not like we can give you anything in return!" Apparently the only real benefit of Rebel Sport's loyalty program is the monthly member-only specials. If I wanted one of these specials, then I might sign up - but the only reason to scan your card otherwise would appear to be so they can track your purchases and send you marketing.

 

[basso]

"Loyalty" was always a bit of a misnomer. A loyalty program is nothing more than a package of benefits, that hopefully bring the company incremental revenue. Tiered Loyalty programs take it a bit further, providing a bit of pampering and ego massaging. If that floats your boat, then great. But don't get hung up on the idea that true 'loyalty' has anything to do with it, in never did, never will.

 

[marki]

I have 365 SC left on QF to get P1 ..... how would I best get the remainder of those credits if I wanted to fly Melb - Perth .... I am not dead yet it seems with loyalty .....

 

[TonyHancock]

I have 365 SC left on QF to get P1 ..... how would I best get the remainder of those credits if I wanted to fly Melb - Perth .... I am not dead yet it seems with loyalty .....

I will be 440TP's shy of 8000 by the end of my year and I will almost certainly try to get them. I am not in the slightest bit loyal to BA but I do want the extra Joker or 2 Gold Upgrades. (Haven't decided which yet.) So it is straightforward business for BA and me. No loyalty involved.

 

[Awesom Andy]

As good as QF has been for me, I'm currently on 190 SC after 6 months of my calendar year. Definitely no WP for me this coming year.

 

[Bodie]

I think their is two types of loyalty.

First type is loyalty due to personal loyalty, that you will continue to use even if you move houses and others can perform same tasks for same/sim price- ie Go to the same hairdresser, accountant, doctor, other medical services, vet, electrician etc. You dont get points or bonuses, but get provided service promised and it familiar, comfortable.

Second type is loyalty for benefit- airlines, hire cars, hotels etc. They reward your loyalty with bonus points , levels of memberships - lots of people have memberships to multiple organisations in this category and each will have level they are comfortable with - based on travel, budgets and other parameters. Some will shop around inside these organisations based on renew dates, etc to maintain levels. In some respects this loyalty type is very difficult for these organisations. They all want your business and its balancing act - what they can do to convince you to stay but do it cost effectively from business sense but enough to encourage people to stay more and encourage others who have no affiliation to join the program or those dictated totally by price to use their services. Obviously some will just use personal loyalty to one airline or hotel change for their travel

So effectively they want to build personal loyalty but with many different customers (masters) they dont always succeed in getting it right all the time.

 

[Wingin..it]

You seem to link loyalty to a program when in reality good customer service trumps everything.[/QUOTE

I was commenting on loyalty programs and as such my comment was aimed at programs .I do agree that customer care creates the best loyalties regardless.
Good programs may not always have the best customer care and good customer care can create loyalty without a so called card.

As some other comments there seem to be many cards now vying for wallet space?????Which ones etc was part of my point .
I quite like the frequent flyer loyalty as it is geared to benefit frequent flyers ,status ,points ,hotels etc .We have a right to question when the program is changed or becoming not as beneficial.
I would rather put most effort into one though and not spread between too many loyalty programs.

 

[leadman]

I've always viewed hotel loyalty over airline loyalty, I think after the Ansett collapse changed the way I thought. But it certainly has paid off recently as I'm Pt life of Marriott and with the merger with SPG, they match your current status!!!!! Looking forward to the BKK Sheraton over the JW.

As now self employed the bigger driver for me with airlines is to be able to check in at the shortest line and getting easy internet. Wining and dining in the lounges is neither here-or-there any more as sometimes there is much better food outside.

 

[trippin_the_rift]

Loyalty is dead when the underlying reason for remaining committed is removed. This results in long-term damage to intrinsic motivation.
For example - you love your partner and therefore are loyal. Remove or damage the love, and loyalty becomes questionable.

With airlines, frequent flyer programs it's essentially Loyalty 1.0 with basic gamification with points/levels. Fundamentally boils down to the folks who get on the train will follow a predictive engagement trend for their persona/segment type as defined by the loyalty program. With a lifespan timeline in mind (X=time, Y=engagement/loyalty), there comes a point where behaviors of members in that segment begin to abandon the habits which the loyalty program was engineered to foster. This is because it's a one-way driving motivation.

So loyalty isn't ever dead - but like a computer game - you might be out of lives, out of impetus, and looking for the next game. Everyone taps out at a different stage.

One of the most recognized methods to engender long-term loyalty term (and meaningful loyalty which creates a powerful loop) is using the network design concepts to help people find personal connections in a real-world setting. For example - if your Qantas Platinum status hinged on your best friend retaining their Platinum - you'd be out there finding status runs for your best friend to make sure they keep their status. This ties into what is referred to as Loyalty 2.0 or next-gen loyalty, and when airlines catch onto the program design mechanics - get ready for a new wave of loyalty marketing which will take frequent flyer programs to new levels of profitability.

... and happy 3,000 posts to me!

 

[Deleted member 29185]

... and happy 3,000 posts to me!

Happy 3000th postday!

I've heard it said many times, that loyalty schemes make businesses good money. ie, they are profitable. I don't understand the dynamics of this, but I do wonder why, if loyalty schemes are so profitable, airlines take to them with the hedge clippers, happily wearing the wrath of the members, which risks their profitability. Is it because they're trying to make more money, or because they believe members are so blinkered they'll just accept it, or because they believe members have nowhere else to go?

 

[trippin_the_rift]

Happy 3000th postday!

I've heard it said many times, that loyalty schemes make businesses good money. ie, they are profitable. I don't understand the dynamics of this, but I do wonder why, if loyalty schemes are so profitable, airlines take to them with the hedge clippers, happily wearing the wrath of the members, which risks their profitability. Is it because they're trying to make more money, or because they believe members are so blinkered they'll just accept it, or because they believe members have nowhere else to go?

You know I was at Cathay City last week explaining this very dynamic to someone in the biz!! :shock:

Banks make up almost all of the revenue for frequent flyer programs, and here's how it works:

You spend money on your credit card and the card issuing bank (your bank), and the merchant bank (whoever runs the terminal) split the bulk of the merchant fee and bank it as revenue. Your bank receives a % of the fee (essentially your bank is making $$ each time you make a purchase). With the new revenue your bank has made from your transaction, they might decide to give a portion of this back to you - as points. So you made your bank, say 50 cents in transaction fees and they give you back (as an example), 10 cents in points. The bank will buy points from the airline loyalty program and deposit them in your frequent flyer account. So the customer, to the airline, is really the bank. You're simple a proxy for the transaction to take place.

Here's an excellent video explaining it: https://www.youtube.com/watch?v=-i50YVaD-tk

As for loyalty programs coughizing them... it's done entirely to generate cash. Adding perceived benefits into the program (part of FFP engineering), is more complicated as the airline gets involved.

Here're the two primary ways they make $ by devaluing the program.

1) Devalue the points, which lets the program instantly bank the difference between the old and new marginal values.
Easy to understand, right?

Fundamentally there are two control mechanisms for loyalty programs. Loyalty programs control the attributable revenue on each new point/mile created into existence inside the program. On the other side - control over the cost of redemptions, which essentially is a margin between what was made in revenue on those points and what it's costing them for the redemption.

2) Decrease the number of points you earn from partner/alliance flying.
A bit trickier - each time your FF# is on a non-host airline booking (eg: your QF FF# is on a CX flight number), Cathay will pay Qantas a nominal amount (based on the fare class). Now, Qantas at this point has the option to give you anything they want for this flight. Let's say Qantas make $5 from your cheap N class fare on CX. QF may have in their terms that N class fares 'won't earn any Qantas points'. This doesn't mean QF makes no $$ from your flight - just that QF doesn't want to give you any points for it. This is free money for the airline program.

I could dive deeper into each aspect as it's more complex but this should give you a general understanding of the dynamics in play.